| 1. | RESULTS OF OPERATIONS |
| 1.1 | Segmental summary |
| The Group's segment reporting follows the organisational structure as reflected in its internal management reporting systems, which are the basis for assessing the financial performance of the business segments and for allocating resources to these segments. Management's assessment of the Group's organisational structure takes the geographical location of the segments into account. | |
| Operating segments are reported internally to the chief operating decision-maker in a manner consistent with the financial statements. In addition, the chief operating decision-maker uses core headline earnings as a non-IFRS measure in evaluating the Group's performance on a segmental level. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Executive Directors, who are responsible for making strategic decisions on behalf of the Group. | |
| Transactions between reportable segments are conducted on similar terms as other transactions of a similar nature. | |
| The segment results for the year ended 31 May 2023 are as follows: |
| Total | Africa Distribution | International | Solutions | Corporate | ||||||||
| 2023 R'000 |
2022 R'000 |
2023 R'000 |
2022 R'000 |
2023 R'000 |
2022 R'000 |
2023 R'000 |
2022 R'000 |
2023 R'000 |
2022 R'000 |
|||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Continuing operations | ||||||||||||
| Total segment revenue | 24 958 278 | 24 531 675 | 24 470 272 | 24 023 222 | — | — | 283 366 | 254 571 | 204 640 | 253 882 | ||
| Internal revenue | (6 040 015) | (6 725 413) | (5 826 462) | (6 470 619) | — | — | (8 913) | (912) | (204 640) | (253 882) | ||
| Revenue | 18 918 263 | 17 806 262 | 18 643 810 | 17 552 603 | — | — | 274 453 | 253 659 | — | — | ||
| Segment result | ||||||||||||
| Operating profit/(loss) before depreciation, amortisation and the additional items listed below | 2 042 028 | 1 963 009 | 2 143 415 | 2 023 935 | ||||||||
| Fair value gain on surety receivable | 32 743 | 12 859 | — | — | (650) | (620) | 40 608 | 27 494 | (141 345) | (87 800) | ||
| Fair value gain on put option | 22 000 | — | — | — | 32 743 | 12 859 | — | — | — | — | ||
| Fair value gain on other financial instruments | 14 533 | 50 387 | 14 533 | 4 208 | — | — | — | — | 22 000 | — | ||
| Expected credit loss on loans | (69 571) | (73) | (69 028) | 602 | — | — | — | — | — | 46 179 | ||
| Financial guarantee contracts | — | 671 | — | 671 | (98) | (471) | (445) | (204) | — | — | ||
| Bad debts and expected credit losses on trade receivables, other receivables and advances to customers | (667 354) | (328 359) | (667 551) | (328 572) | — | — | 196 | 213 | 1 | — | ||
| Loss on modification of financial instruments | (57 453) | — | (57 453) | — | — | — | — | — | — | — | ||
| Depreciation and amortisation | (190 440) | (174 045) | (168 976) | (153 205) | — | — | (655) | (628) | (20 809) | (20 212) | ||
| Operating profit/(loss) | 1 126 486 | 1 524 449 | 1 194 940 | 1 547 639 | 31 995 | 11 768 | 39 704 | 26 875 | (140 153) | (61 833) | ||
| Finance costs | (682 599) | (201 225) | (681 193) | (197 477) | 1 | — | (79) | (236) | (1 327) | (3 512) | ||
| Finance income | 411 540 | 80 993 | 407 731 | 79 733 | — | — | 3 317 | 1 108 | 491 | 152 | ||
| Reversal of impairment of investment in associate | 962 531 | — | 962 531 | — | — | — | — | — | — | |||
| Share of (losses)/profits from associates and joint ventures | (1 329 747) | 8 042 | (1 320 348) | 1 678 | — | — | (9 399) | 6 364 | — | — | ||
| Taxation | (200 038) | (320 262) | (187 893) | (313 621) | (7 892) | (2 119) | (4 398) | 865 | 145 | (5 387) | ||
| Profit/(loss) for the year | 288 173 | 1 091 997 | 375 768 | 1 117 952 | 24 104 | 9 649 | 29 145 | 34 976 | (140 844) | (70 580) | ||
| Profit/(loss) for the year attributable to: | ||||||||||||
| Equity holders of the parent | 268 966 | 1 027 079 | 360 771 | 1 058 951 | 24 104 | 9 649 | 24 935 | 29 059 | (140 844) | (70 580) | ||
| Non-controlling interest | 19 207 | 64 918 | 14 997 | 59 001 | — | — | 4 210 | 5 917 | — | — | ||
| Reconciliation of profit/(loss) for the year to core | ||||||||||||
| headline earnings for the year | ||||||||||||
| Profit/(loss) for the year attributable to equity holders of the parent | 268 966 | 1 027 079 | 360 771 | 1 058 951 | 24 104 | 9 649 | 24 935 | 29 059 | (140 844) | (70 580) | ||
| Amortisation of intangibles raised through business combinations net of tax and non-controlling interest | 31 605 | 32 169 | 31 605 | 32 169 | — | — | — | — | — | — | ||
| Headline earnings adjustment | 101 390 | 1 832 | 101 026 | 1 708 | — | — | 305 | 428 | 59 | (304) | ||
| Core headline earnings for the year | 401 961 | 1 061 080 | 493 402 | 1 092 828 | 24 104 | 9 649 | 25 240 | 29 487 | (140 785) | (70 884) | ||
| The Company is domiciled in the Republic of South Africa. The revenue earned from external customers in South Africa is R18.9 billion (2022: R17.8 billion), and from external customers from other countries is R3.1 million (2022: R2.6 million). | |
| The Africa Distribution segment includes revenue of R3.5 billion and R2.2 billion earned from two external customers. | |
At 31 May 2023, the Group is managed on the basis of four main business segments:
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| Core headline earnings Core headline earnings is a non-IFRS measure used by the Group in evaluating the Group's performance. This supplements the IFRS measures. Core net profit is calculated by adjusting net profit for the year with the amortisation of intangible assets net of deferred taxation and non-controlling interests that arise as a consequence of the purchase price allocations completed in terms of IFRS 3 – Business Combinations. Core headline earnings is calculated by adjusting core net profit with the headline earnings adjustments required by SAICA circular 1/2023. |
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| Reconciliation of core headline earnings to relevant IFRS measures is presented in note 1.5 |